The Struggles of Running a Startup in Ghana: Testimonials from 5 Startup Founders

Failure in the tech industry is just pre-greatness – Hooli team (Silicon Valley)

In recent weeks, I’ve been privileged to hang around a few Ghanaian tech startup founders and it’s really interesting, the kind of conversations that ensue between them. From the difficulties of raising seed funds to managing staff who want to kill you before your time etc…it’s all fascinating and truly commendable.

But then, who really cares? Your customers don’t – they just expect your service to work. Your staff expect to be paid at the end of the month. Your investors expect ROI. There’s just so much that could go wrong, but yet again, you’re the boss – you’ve got to smile for the cameras.

Running an established business in Ghana is difficult on it’s own. Building a startup is suicide. Yes I’m sure you’ve heard it before but i’m here to remind you – SUICIDE!

If after 3 months you’re still afloat, I really duff my hat to you. Ghana as a nation can really frustrate you. You think you’re taking a few steps forward, but you meet a jam, and boom! You’re taken 5 steps back. Startup founders really deserve free lunch at Golden Tulip, everyday.

After a few meaningful conversations with a few founders, I decided to highlight some of the issues they face and give my own little 5 cents, on how to scale them. (At this point, I’m thinking you’ve already gone through the hassle of RGD)

Cashflow

OMG Digital Founders | Credit: Mefirighana.com

Finding and maintaining cash flow is usually a huge climb for startup founders in Ghana for several obvious reasons. There’s the fact that there’s little or no local funding – Investors based in Ghana are either not investing or they’re throwing their money in other industries which means that startups have to look outside to secure investments. This, in turn, hinders scaling and slows down expansion significantly and there’s also the possibility that they might have to lay off staff occasionally.

But hey, all hope is not lost – you’ve just got to be good at saving. Put away a significant part of your receivables which forms a rainy day fund for your startup.

Unplanned expenses

Shypmate team | Credit: AmeyawDebrah

You walk into the office on a Monday morning and ECG is out, generator plant won’t come on, your staff can’t work, and it seems like all hell is breaking loose. The plant mechanic brings you a bill of over 3,000Ghs – out of nowhere!!

Yes, startup founders deal with unplanned expenses like this on a weekly basis. Suffice to say, your monthly budget is just a guide because bills spring up as they wish. Key to pacifying this is a rainy day fund. Keep a little slush fund for when the devil tries to rear it’s ugly head.

Your Own Staff

Silicon Valley HBO

A few days back, Edem tweeted about an issue he had with a worker from HiSense and how it nearly cost the business a customer. This is regular with workers in Ghana. There’s always that one staff who with every action of theirs, tries to run your business down and it comes in large doses.

The key to curbing this is, hire well. Don’t cheat on hiring. If you’re saving cost, that low wage staff might actually cost you your business. I’d rather you strap up well enough to hire the best there is.

Debtors

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In a society like Ghana where there’s literally no credit system that works for SME’s, you’re bound to have debtors. If you’re a startup that doesn’t require instant payment for services (I.e – people get to choose when to pay), you’re for sure going to have a problem with debtors. Your clients will owe you – especially the corporates and government agencies who have payment schedules.

Best bet is to always collect a prepayment, no matter how little. If you can, create a value system in your company and offer the best quality of service, that with any luck, you could collect 100% up front. You’d be better off for it.

Friendships

Logique Co-Founders | Credit: Joyonline

To a large extent, friendships make a chunk of the reasons why startups fail. Most times, building a startup with friends never ends well. There are also those friends who don’t support their friend’s hustles, but want their services or products for free – Ugh!

Not only does it make it difficult to compartmentalize the two relationships, but there’s a sensitivity that comes with our Ghanaian people when money comes in the mix of friends.

Although exceptions exist, but if you can, avoid building a startup with friends, that is if you value that friendship. But if you must, document set-in-stone equity agreements that ensure partners get what is due them.

Everybody wants a piece of you

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Just because your email signature/Twitter bio says CEO/founder, literally everyone wants a piece of you or what you’re selling (for free). The government, tax man, auditor and sometimes, clients. Your success or failure might depend on ensuring that the monthly “tax collectors” are happy.

You have to think of all these guys when running your numbers because they can make or mar your startup. When they’re happy, your business runs smoothly! Be wise…

Loneliness

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Although the most commonly used phrase by Startups founders is “Everything’s great” or “We’re killing it right now” many are dealing with some intense problem all of the time. It’s hard for startup founders to admit that they’re struggling. Many founders feel like they have to project an invisible image so that employees, investors, and members of the broader community have confidence in them. Shouldn’t be so!

You need to know that there are other founders going through the same pain that you are. Attend meetups, join an accelerator program, write, start a podcast or pick a drinking club in Osu and stick with it.

These are just a few of the everyday struggles, startup founders in Ghana have to go through each day. They are truly heroes without capes. Next time you meet a startup founder, give them a warm hug, then take them to lunch. They deserve it!!

N.B: The Tech in Ghana conference is a good opportunity to hear their struggles from the horse’s mouth. If you haven’t, register here: Attend